Most major commodities traded lower overnight, iron ore slumping to 127.00 from 141.00 in the past few sessions putting enormous pressure on the Australian Dollar (AUD) . Price deteriorated to 0.6840 as risk conditions worsened and focus on the Fed raising rates continues to cause concerns. US Inflation is still running hot despite publishing down at 8.3% in April, this was higher than the predicted 8.1% but dropped from 8.5% the 41 year high published in March. Energy prices rose 31% vs 32% and fuel oil increased a massive 81% vs 70%. The US 10Y Bond yield is down at 2.83% from Monday’s 3.2% signalling possible Fed pain ahead. The safe haven greenback may be flavour of choice for a while yet. On the chart there looks to be nothing but air all the way to support at 0.6720. A retest of this area is a possible outcome over the next few trading sessions. Looking ahead we have US Retail Sales and Australian unemployment data to publish before Australian parliamentary elections start next weekend.
Exchange Rate:
The current interbank midrate is: AUDUSD 0.6874
The interbank range this week has been: AUDUSD 0.6827- 0.7072